02349cam a22002417 4500001000600000003000500006005001700011008004100028100002200069245012800091260006600219490005100285500001900336520136300355530006101718538007201779538003601851700001901887710004201906830008601948856003702034856003602071t0093NBER20161209225149.0161209s1990 mau||||fs|||| 000 0 eng d1 aStiglitz, Joseph.10aSorting Out the Differences Between Signaling and Screening Modelsh[electronic resource] /cJoseph Stiglitz, Andrew Weiss. aCambridge, Mass.bNational Bureau of Economic Researchc1990.1 aNBER technical working paper seriesvno. t0093 aNovember 1990.3 aIn this paper we analyze games in which there is trade between informed and uninformed players. The informed know the value of the trade (for instance, the value of their productivity in a labor market example); the uninformed only know the distribution of attributes among the informed. The informed choose actions (education levels in the Spence model); the uninformed choose prices (wages of interest rates). We refer to games in which the informed move first as signaling games - they choose actions to signal their type. Games when the uninformed move first are referred to as screening games. We show that in sequential equilibria of screening games same contracts can generate positive profits and others negative profits, while in signaling games all contracts break even. However, if the indifference carves of the informed agents satisfy what roughly would amount to a single crossing property in two dimensions, and some technical conditions hold, then all contacts in the screening game break even, and the set of outcomes of the screening game is a subset of the outcomes of the corresponding signaling game. In the postscript we take a broad view of the strengths and weakness of the approach taken in this and other papers to problems of asymmetric information, and present recommendations for how future research should proceed in this field. aHardcopy version available to institutional subscribers. aSystem requirements: Adobe [Acrobat] Reader required for PDF files. aMode of access: World Wide Web.1 aWeiss, Andrew.2 aNational Bureau of Economic Research. 0aTechnical Working Paper Series (National Bureau of Economic Research)vno. t0093.4 uhttp://www.nber.org/papers/t009341uhttp://dx.doi.org/10.3386/t0093